Streets Ahead : Streets Ahead Edition 11
3 1. National homebuyer confidence reaches new post-GFC high: The HCI increased slightly from 99.2 in March 2015 to 99.6 in September 2015, its third consecutive increase since March 2014. This increase was mainly driven by the proportion of all respondents who use over 50% of their income to service debts falling from 29% in March 2015 to 23% in September 2015 2. First Homebuyer confidence falls: After increasing to a record high of 102.1 in March 2015, FHB confidence fell to 98.4 in September 2015, back to the level it was 12 months ago in September 2014. This decrease was driven by a higher proportion of FHBs who experienced mortgage stress 21% (up from 9% in March) and FHBs who expected mortgage stress 14% (up from 8% in March 2015) 3. Victoria takes the lead: The HCI in Victoria increased from 97.6 in March 2015 to 100.4 in September 2015, the highest level of confidence among the states. Victorians are less likely to be heavily indebted, with only 17% using more than 50% of their income to service debts, down from 25% in March 2015. As well as lower interest rates, Victorians may also be paying down their debts, with the average number of unique debt products held by these respondents falling from 1.6 to 1.4 between March and September 2015 4. Australians are less likely to believe it is a good time to buy property: Despite the second official RBA cash rate cut of the year in May 2015, most respondents have become less likely to believe it is a good time to buy property. The proportion of respondents who believe it is a good time to invest in property fell from 47% to 44% between March and September 2015, while the proportion who believe it is a good time to buy a home fell from 52% to 48% over the same period. The perception that property is overvalued was the most common reason given by those who believe it is a bad time to buy a home or investment property 5. Accessibility continues to be the biggest barrier: High property prices (34% compared to 35% in March 2015), followed by the difficulty of saving for a deposit (stable at 20%), continue to be perceived as the biggest barriers to purchasing a first home. FHBs are increasingly using alternate sources of debt to achieve their deposit including credits cards (19% up from 3% in 2013) and personal loans (18% up from 8% in 2013). This reliance on other sources of debt to fund deposits may explain why FHBs are more likely to be heavily indebted, at 35% compared to the average of 23%. These figures indicate that accessibility (the ability to enter the property market), as opposed to affordability (the ability to meet mortgage repayments), remains the key challenge for those wishing to enter the property market 6. Consumer perception of the Australian housing market: Most Homeowners (63%) and Non-Property Owners (70%) believe that the housing market in Australia is overheated, with foreign buyers (32%) and property investors (19%) being seen as the biggest drivers. However, despite this perception, 86% of respondents expect prices to either remain stable or increase further in the next year. Summary In this edition the key findings are: Welcome to the 11 th edition of the Genworth Homebuyer Confidence Index (HCI), a measure of Australian Homeowners’ and Non-Property Owners’ sentiment towards the housing and mortgage market.
Streets Ahead Edition 12